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Utah Water Rights Mandate Opens Door for New Underwriting Policy

HOUSTON-Utah's water rights legislation has sparked at least one title insurer to launch a new policy for water conveyance rights. Water rights are becoming more valuable than the land, says a company executive.

By Jennifer Brenner Andrade | Updated on January 15, 2001

HOUSTON-Stewart Information Services Corp., based here, is selling water rights insurance in Utah, where legislation now requires such reports to be on file in the state engineer’s office. Similar to title insurance, Stewart Water Information’s policy ensures that its water conveyance reports will accurately assess water rights for land transactions or the purchasers will be indemnified against any losses due to predecessor assessment errors.

Stewart has kicked off the policy in response to Utah’s May 1, 2000 legislation that requires all real estate transactions to have a water conveyance rights report. The need for such a product stems from water shortage and allocation problems that have historically dogged the West.

“Particularly in the western United States today,” Ted Jones, director of investor relations tells GlobeSt.com, “water rights are becoming even more valuable than the land underneath it, and they are a market commodity all the way from Colorado to California.”This new insurance will decrease the risk inherent to real estate transactions where water rights significantly impact the bottom line.

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